ATM expansion has urban bias

It’s difficult for customers living in semi-urban and rural areas to find ATMs (automated teller machines) while easy for those in metro cities. The reason being banks are installing more ATMs in urban areas than in rural ones.

Banks have installed just 1,931 ATMs in the rural areas while in metro cities lenders installed 6,453 machines in 2012, according to the Reserve Bank of India (RBI) data. Total number of ATMs in metro cities stood at 36,441 while in rural areas it was just 9,896 at the end of 2012.

“Banks are providing banking services in rural areas through business correspondents which reach out the rural customers directly,” said senior official of a public sector bank who head retail banking. “Also banks are planning to install solar-powered ATMs in rural areas to overcome the problem of shortage of electricity.”

Total ATMs count in India grew by 22% to 10,5784 at the end of 2012 from 87,355 in 2011. Going forward, the ATM expansion in rural areas is likely to get boost as the machine manufacturer — NCR Corporation and Diebold Systems — have solar-powered ATMs ready for Indian market. These ATMs, designed for semi-urban and rural areas, use less power and can withstand higher temperature ranges.

“The new ATMs will further increase the penetration of banking services in rural and semi-urban areas,” said Karthik Ganapathi, managing director (South Asia), Diebold Systems.

With many people still out of banking net, the number of ATMs will increase further, say experts.

“ATMs have played crucial role in spreading banking services in India. India will see significant rise in the number of ATMs in next few years,” said Rituraj Sinha, managing director, SIS-Prosegur, India-based cash management company.